The Growing Burden of Managing Managed Care

These days, skilled nursing facilities face a range of new challenges never encountered before. One of the most clear-cut is the difficulty in trying to stay on top of complex managed care plan reimbursement rules.

The Big Picture

For SNFs, the trend toward the managed care model is certainly showing no sign of slowing down. In fact, enrollment in Medicare Advantage plans has doubled over the past ten years, to 24.1 million in 2020*. That includes 9% growth over each of the past two years. The Congressional Budget Office (CBO) expects 51% of all Medicare beneficiaries will be enrolled in a Medicare Advantage plan by 2030.

At the same time, 39 states and the District of Columbia have leveraged the infrastructure built for Medicare Advantage plans in order to contract with insurance companies to provide 290 different Managed Medicaid plans to nearly 70% of Medicaid beneficiaries.

These dizzying numbers are the bellwether of a growing threat to the operational viability of skilled nursing facilities that lack the ability to proactively handle Managed Care Organization (MCO) reimbursement.

MCOs represent an increasing percentage of skilled nursing facility revenue — and often as much as twice that percentage in outstanding A/R. Clearly, most if not all MCO plans have highly complicated administrative, care documentation, and billing requirements, requiring SNF facility personnel and central RCM staff to stay well-versed in contractual details and operational procedures. 

For example, the Kaiser Family Foundation (KFF) points to the fact that 98% of Medicare Advantage beneficiaries require prior authorization before a skilled nursing facility stay.  Therefore, SNFs must ensure that getting an authorization happens automatically, or else claims will be denied, triggering the need for time-consuming and tedious additional follow-up and documentation chores, delaying receipt of revenue.

Doing Your Homework

Although an admittedly daunting process, SNFs should regularly analyze their current MCO contracts by tapping both internal and external assets like the staffers who negotiated the contracts and are the most familiar with the details. Many MCOs offer plan design orientation and updates via online and phone sessions. According to KFF, Just three insurance companies — Humana, BCBS, and United Healthcare — administer 44% of all Medicare Advantage enrollees. If your SNF operates in multiple states, it’s likely you’ll see common plan design elements and requirements and can leverage this expertise across state lines. Within PointClickCare, it’s essential that you set up the payer to match your contract with the MCO, and isolate excluded charges or charges that can be billed over the standard rate.

As well as undertaking proactive measures, it’s wise to do retrospective analysis of results: Have the MCOs been paying according to their terms and payment models? A solid analytics platform for modeling expected payments and analyzing the results helps validate the collectability of your revenue and uncover root causes of denials. Also, such a platform can pinpoint areas where MCOs are not complying with contract terms but are pressuring your organization with more aggressive rates and terms. With such essential information in hand, you’ll be well prepared to negotiate the best contract and terms for your enterprise.